Travel healthcare stipends, per diem rates and take-home pay, explained
Travel therapy pay is confusing on purpose. Two offers can quote the same “$2,300 a week” and be worth thousands of dollars apart over a thirteen-week contract, because one of them loads the money into tax-free stipends and the other into taxable wages — and because the tax you owe depends on which state you land in. Here is what sits behind the calculator above.
What is a travel healthcare tax-free stipend?
A stipend is not a bonus and not a wage. It is a reimbursement for the cost of working away from home, and federal law treats it very differently from your hourly rate. Under Internal Revenue Code § 162(a)(2), ordinary and necessary travel expenses incurred “while away from home in the pursuit of a trade or business” are deductible business expenses. When your agency reimburses those expenses through an accountable plan, the money is excluded from your wages entirely: it never appears in Box 1 of your W-2 and no income tax, Social Security or Medicare tax is withheld on it.
Three conditions have to hold, all at once. First, you need a tax home. The IRS defines it in Publication 463 as your regular place of business, not your family home; where no regular workplace exists, Revenue Ruling 73-529 applies a three-factor test based on whether you perform work near your claimed home, duplicate living costs there, and keep real personal ties to it. Second, the assignment has to be temporary: under Revenue Ruling 93-86, work realistically expected to last more than a year is indefinite, and the moment your expectation changes, the exclusion stops. Third, you must actually be duplicating expenses — paying for housing in two places at once. A traveller who gave up their apartment and lives out of assignment housing has no tax home, is treated as an itinerant worker, and owes ordinary income tax on every dollar of the package.
The riskiest arrangement in this industry has a name. In Revenue Ruling 2012-25 the IRS addressed wage recharacterization: schemes in which an employer relabels part of an ordinary wage as a reimbursement so that the same work produces the same total pay with less tax. Such arrangements fail the business-connection requirement of an accountable plan, and the “reimbursements” are wages. That is why the calculator warns when the taxable hourly rate falls far below what a staff clinician in your discipline earns: the exposure sits with you, on your return, not with the recruiter.
How GSA per diem rates work
Agencies do not invent stipend ceilings. The General Services Administration publishes the maximum per diem rates federal employees may be reimbursed in the continental United States, and the IRS lets private employers use those same figures as a safe harbour under Revenue Procedure 2019-48. Pay at or below the applicable federal rate under an accountable plan is deemed substantiated as to amount; anything above it is taxable to you unless you substantiate the actual expense.
Rates run on the federal fiscal year, 1 October to 30 September. For fiscal year 2026, GSA held the standard CONUS rate flat at $110 per night for lodging and $68 per day for meals and incidental expenses, a combined $178 a day. Several hundred higher-cost locations — most large metros, plus seasonal destinations — are designated non-standard areas with their own, often much higher, lodging rates that can change month to month. The M&IE allowance is reduced to 75% on your first and last day of travel, and lodging per diem covers the room rate and taxes only.
Two practical consequences. A housing stipend that looks enormous is not automatically a problem: if you are assigned to San Francisco or Boston, the local GSA lodging rate genuinely is far above $110 a night, and the calculator says so rather than crying foul. But if you are in a small market and the housing stipend runs well past the local federal rate, the excess is compensation with a bow on it. Look your assignment city up on the GSA rate tool before you accept an agency's number as gospel.
How this calculator estimates your take-home
The tool runs the arithmetic in four steps. It multiplies your taxable hourly rate by guaranteed hours (plus any overtime, which is always paid on the taxable rate) to get weekly taxable wages, then adds the housing, meals and other stipends to get the gross package and the blended hourly rate agencies advertise. It annualises the taxable wage over the number of weeks you actually work — the default is 48, because most travellers take time off between contracts — so that the marginal bracket is realistic rather than assuming 52 paid weeks.
It then applies three layers of tax to those annualised taxable wages. Federal income tax uses the 2026 brackets and standard deduction from IRS Revenue Procedure 2025-32: for a single filer, a $16,100 standard deduction and rates from 10% up to 37%. If you enter overtime it also applies the "no tax on overtime" deduction created by the One Big Beautiful Bill Act for 2025–2028 — but only on the FLSA-required half-time premium for hours beyond 40 a week, capped at $12,500 ($25,000 filing jointly) and phased out above $150,000 of income. That deduction reduces federal income tax only; it does not touch FICA, and because it sits below federal AGI it does not reduce state tax either. FICA is 6.2% for Social Security on wages up to the 2026 contribution base of $184,500, plus 1.45% Medicare on everything, plus the 0.9% Additional Medicare Tax above $200,000 ($250,000 filing jointly). State income tax uses each state's published 2026 single-filer brackets, standard deduction, personal exemption and personal credit. Nine states levy no income tax on wages at all, which is why Texas and Tennessee contracts keep beating higher-gross California ones.
Finally it converts the resulting effective rate back into weekly and whole-contract figures, and solves for the fully taxable staff salary that would leave you with the same annual take-home — usually a sobering number, and the most useful single output on the page.
What it deliberately does not do: model pre-tax 401(k) or health premium deductions, tax credits, itemised deductions, multi-state nonresident filing and home-state credits, state disability or paid-leave payroll contributions, or local city and county income taxes (there is an optional field for those, and in Ohio, Pennsylvania, Maryland, Indiana and Kentucky you should use it). It also assumes you are a W-2 employee, which the overwhelming majority of travel therapists are. It is a planning estimate, not a tax return.
The one habit worth building
Ask every recruiter for the taxable rate and each stipend as separate line items in writing, before you talk about the blended rate. Two packages with the same headline number rarely have the same taxable base — and the taxable base is what your overtime, your unemployment benefit, your Social Security record and your mortgage application are all built on.
Go deeper
Eight sourced guides on the parts of travel therapy pay that cost people money. All written for PT, OT, SLP and allied health — not nursing.